Dan Flynn is the writer of The Corn & Ethanol Report, a daily market letter covering grains, energies, and various global issues that are the driving force and backbone of the commodity markets. Contact Mr. Flynn at (312) 264-4374
We start off the week with Chicago Fed National Activity Index (AUG) at 7:30 A.M., Export Inspections at 10:900 A.M., 3-Month and 6-Month Bill Auction at 10:30 A.M., Fed Brainard Speech at 11:00 A.M., Crop Progress at 3:00 P.M. and followed with Fed Kaplan and Fed Williams Speech at 5:00 P.M.
On the Hurricane front Tropical Storm Beta threatens the Texas and Louisiana coastline moving west-northwest at 5 knots and Maximum winds at 50 knots. Disturbance 2 located inland southwestern Florida. It is expected to drift southwest in the Gulf with little chance to develop into a big storm. Hurricane Teddy is moving west-northwest at 8 knots. The current cone has it bouncing off the Maine coastline and moving into portions of Canada. Tropical Depression Wilfred is moving west-northwest, and the current cone will have the Gulf of Mexico’s attention. And we have Disturbance 1 Post-Tropical Storm Paulette is located a few hundred miles south of the Azores. It is moving eastward into the high seas and will be monitored from Europe.
On the Corn Front the grains rallied moving into the weekend. Cash market is moving slow in corn with farmers reluctant to sell hoping to see higher prices. Funds added to existing long positions and we should be getting further takes on yields with Crop Progress today and throughout the week with news from the farm as yield we be evaluated further as harvest continues. Barchart has raised it’s projections on corn and soybean yields. We will be watching the U.S. dollar, exports, new purchases (if yield continue to rise). In the overnight electronic session, the December corn is currently trading at 376 ¾ which is 1 ¾ of a cent lower. The trading range has been 378 ¼ to 375.
On the Ethanol Front AG News Wire reports last week was a week of good news for the ethanol industry in three major areas, exports, expansion of higher blends, and protecting the renewable fuel standard. In the days to come we will be hearing from industry leaders comments on EPA denial of retroactive refinery waivers, Brazil’s 90-day extension of its ethanol tariff rate quota, and the potential of E10 fuel pumps could be used to dispense E15. There were no trades posted in the overnight electronic session. The October ethanol settled at 1.355 and is currently showing 1 bid @ 1.220 and 0 offers with Open Interest at 40 contracts.
On the Crude Oil front the October contract expires tomorrow. And we are off to a slow start this morning with news Libya is starting to ramp up oil production after a political hiatus. This brings back demand doubts in shoulder season and travel restrictions globally. We could have a choppy week with demand fears back in the market and a active hurricane season which will have updates to the severity of all threats in the Gulf of Mexico this week. We also will have API Energy Stocks tomorrow and notwithstanding the current atmosphere that number should be interesting after this last month. In the overnight electronic session, the November crude oil is currently trading at 4027 which is 105 points lower. The trading range has been 4149 to 4015.
On the Natural Gas front the Commitment of Traders showed funds are not so much more bullish on the energy complex like they are in grains and stock indexes. This could lead to more sell-offs if there are no further disruptions from storms in the Gulf of Mexico. In the overnight electronic session, the October natural gas is currently trading at 1.949 which is .099 lower. The trading range has been 2.038 to 1.945. We could see traders re-apply risk on trades with activity in the Gulf.
Have A Great Trading Day!